Britain, EU lurch closer to trade war

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Irish Prime Minister Micheal Martin decried Mr Johnson’s move as “a new low point”, but his deputy Leo Varadkar noted “a big difference between proposed legislation, and actual legislation being enacted, and then it actually being used”.

The shadow of a potential trade war, even if it is some years away, will loom over a British economy that has contracted for the past two months. Britain is tipped by the OECD to next year log the worst economic performance of any G20 country bar Russia.

The manoeuvring and threats on both sides are partly an attempt to up the stakes and force the other side to blink, in a game of chicken that will continue to play out in slow motion.

The Johnson government hopes the legislation will be enough to get Northern Ireland’s Democratic Unionist Party, which favours strong ties between the province and Great Britain, to lift its veto over the functioning of the Northern Irish government and parliament.

It also hopes the law will shake the EU into realising that Britain is determined to extract further concessions from the 27-member bloc.

In the Brexit deal of 2019, Mr Johnson agreed that Northern Ireland should stay in the EU single market, to avoid jeopardising a fragile peace with a potentially combustible land border.

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But this inexorably meant there would have to be a maritime customs border between Northern Ireland and the British mainland – an outcome Mr Johnson agreed to on paper but never accepted politically.

‘Green lane’

The two sides have been trying to thrash out a mutually acceptable way of smoothing the working of that internal British border, so that it does not gum up intra-UK trade.

The EU proposal is to cut most of the customs paperwork and red tape for British goods heading to Northern Ireland, but with Brussels still retaining a monitoring and enforcement role.

Britain wants a customs-free “green lane” for British goods destined for Northern Ireland, and a “red lane” for goods that will move on from Northern Ireland into the Republic of Ireland.

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Mr Johnson’s legislation also removes the jurisdiction of the European Court of Justice – which the EU sees as integral to its single market – and also reserves the right to unilaterally make further changes.

The British government says it has to fix the system because the anger of the DUP and other unionist parties is threatening the peace deal, known as the Good Friday Agreement, that the warring unionists and republicans signed in 1998.

But even if Mr Johnson’s approach placates the unionists – and they are not yet satisfied – he has raised the ire of the republican parties such as Sinn Fein and the centrist Alliance Party, which together constitute a majority of

Northern Irish MPs following a recent parliamentary election there.

They wrote the British prime minister an excoriating letter on Monday, noting that a majority of Northern Irish voters also rejected Brexit in the 2016 referendum.

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The Johnson government has also argued that Northern Irish businesses are suffering under the current arrangements. But Northern Ireland’s economy is one of only two UK regional economies, alongside London, that has regained its pre-pandemic level.

The legislation was reportedly toughened up last week, after Mr Johnson changed tack following a no-confidence vote that he won by a smaller margin than expected.

The Brexiteer group of Conservative MPs have parlayed his weakness into getting him to more strongly back their figurehead, Foreign Secretary and leadership aspirant Liz Truss.